What do Cloud Brokers do?

What do Cloud Brokers do?

In the same fashion that businesses like insurance agencies have brokers to act and intermediaries between insurance companies and customers, cloud computing has their own brokers that perform nearly the same kinds of tasks.

Due to the staggering number of cloud computing service providers that are springing up everywhere it has become fairly commonplace for companies to utilize brokers to round up and solicit potential clients. There are a few reasons why a cloud computing service provider might want to hire a broker to serve as their customer liaison. First off, as with other business models, having a third party present that is motivated by commission payment only ensures that brokers are only paid for results. So if cloud brokers are able to bring in satisfactory numbers, they are compensated well and the cloud provider has their 'ready to buy' customers prepackaged for them. In other words, everybody wins. Well, almost everybody anyway. There's still the customers themselves, perhaps they will end up paying more over the years for their cloud services because of brokerage fees?

There is however specific benefits for customers that retrieve their cloud services through brokers. Since most cloud brokers are knowledgeable individuals (with regards to cloud computing) they should be able to help clients ascertain what specific kinds of features and / or plan they need to suit them. This is assuming of course that the cloud broker is involved in ethical business practices and is not simply trying to sell customers on tons of features that they simply do not need. (There is a potential for cloud computing companies to offer cloud brokers higher commissions for selling higher priced plans, this could lead to unethical practices where brokers purposefully mislead their customers into purchasing more expensive service packages.)

Of course the relationship between cloud brokers and cloud providers is not guaranteed to be a fruitful one, or even an amicable one. This is after all, a situation where brokers need cloud computing companies more than they need brokers. Ultimately it is up to the cloud service providers to decide what brokers should be paid and / or how truly valuable they are to their respective organizations.

One possible area where brokers might be extremely useful is in selling cloud service packages to larger institutions and businesses. Once again, commission fees are usually based on the overall sale amount; so if a broker lands a contract with let's say 'a large university', then they could be earning extremely hefty commissions. This creates a situation that cloud computing service providers can really benefit from.

It is usually quite difficult for a cloud provider to perform their regular tasks and aggressively market themselves to potential clients, but through the use of brokers that is no longer an issue. In fact most brokers will aggressively seek out clients anyway (to earn those hefty commissions). Look at it this way, it's very expensive for a cloud provider to employ their own team(s) of salaried brokers in much the same way that it's expensive for a business to design and implement their own private cloud network; in both cases it's much cheaper to simply purchase these services a la' carte, so to speak.

What about brokerage firms? Cloud brokerage firms could spring up everywhere. In this business model a large cloud brokerage firm could buy or contract smaller cloud provider companies to provide them with services at discounted rates. In this way, the brokerage firm could set the prices for services and then offer customers specifically designed packages of cloud computing services. In other words, the brokerage firm has all the power and control, the service provider is simply their 'IT department' or manufacturing division.

Then of course there is the ideal situation; whereupon large cloud providers and large brokerage firms work together in symbiotic fashion to grow each of their respective businesses. However many people see this kind of situation as being nearly impossible to maintain due to the nature of business itself and the predisposition of one or the other company to gain control.

It is still pretty much unclear whether or not cloud brokering will become a lucrative or valuable practice. In truth, the power to decide that lies in the hands of consumer. The ultimate success or failure of cloud brokers is determinant on how they conduct their operations.

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We invite you to check out the Cloud Computing Certification Page for more learning opportunities around the management of Cloud Computing environments.